If you’re thinking about selling your property here in California, now might be a good time for you to do so. Median home prices are up in most, if not all of the counties in California. Locally, San Mateo and Santa Clara counties have low inventory, but is increasing, so there would be more buyers for your home and you’ll get a higher price for now. It’s been about approx. 7 years since the great recession and finally we see an improvement for our state.

If it’s the right time to sell, don’t forget to use a REALTOR. You’ll be glad you did. There are so many things involved in a sale, you need a REALTOR to help you get the best price for your home, with least amount of stress. Believe me, if you don’t know what you’re doing, it will cost you in the end. The fee is still tax deductible until the government takes it away. Remember when commercial property mortgage payments and your interest paid to credit cards were tax deductible ? Well not anymore.

Thinking of selling in the near future? If you are, buyers are out there with a positive attitude about home ownership. Since the big recession, buyers believe it is still a good time to purchase their home before they get priced out. So if you’re planning to sell, there are buyers out there ready to purchase your home. Don’t wait too long or you’ll miss all of the excitement.

Due to lack of inventory, San Francisco is really heating up for the summer. The Median Sales Price was up 35.6 % to $1,055,000 for single family homes and 18.2 % to $827,500 for Condo/TIC/Coop properties. Supply of Inventory decreased 23.1 % for single family units and 36.4 % for Condo/TIC/Coop units.

You can almost say good by to the 3% loans. Interest rates are going up as well. Making it even harder for buyers to purchase anything in San Francisco. But, loans are still cheap, don’t wait until they reach double digits again.

San Francisco is doing well. Prices have been and still going up. Fueled by low inventory, low interest rates and a high demand, the market prices will continue to rise. If you think it is hard to buy something today, it will be harder tomorrow.

Single-Family Homes

Median Sales Price: $1,000,000

Active For-Sale Inventory: 541

Days on Market: 27

Condominiums

Median Sales Price: $850,000

Active For-Sale Inventory: 740

Days on Market: 31

Statistics reflect year-over-year figures from April 2012 to April 2013

May 2013

A million dollars doesn’t go as far as it used to in San Francisco

“Don’t you think we should ask for more than a million dollars? A million dollars isn’t exactly a lot of money these days,” Number 2 – Austin Powers International Man of Mystery.

If your clients are looking to buy a home in San Francisco after relocating from elsewhere in the nation, they can be forgiven for making the same mistake Austin Powers did in thinking he could get what he wanted (in his case, world domination) for a mere $1 million. Newcomers to the area are often shocked to find that $1 million might not get them all the amenities in a home that they desire.

Add to escalating prices, high demand, tight inventory and stiff competition from investors who can pay all cash and homebuyers may too take a moment’s pause (with pinky finger firmly resting at the corner of one’s mouth).

Single-Family Home Sales

Compared to April of last year, the inventory of single-family homes for sale in the City fell by 19.6 percent, to a total of 541 properties. The number of homes under contract rose by 11.5 percent, while the number of homes sold dropped by 4.1 percent, to a total of 212 properties.

For homes that were priced below $700,000, the months supply of inventory dropped by 42.6 percent to 1.1 months. For higher-priced homes between $700,000 and $1.2 million, the months supply of inventory also fell, by 20.6 percent to 1.1 months.

Properties being sold within just a few weeks of listing indicates a strong sellers market. Sellers are, in most cases, getting multiple offers due to limited inventory.

One region of the City experiencing a boost of mojo is the Central East section known as District 9 which includes the neighborhoods of Portero Hill, Dog Patch, Inner Mission and Mission Bay. Since 2011, the inventory of homes in this district has shrunk more than 42 percent with just 48 properties for sale in April 2013. At the same time, median prices in the area hit a 2-year high in April 2013.

The Inner Mission neighborhood has become a popular area for young tech professionals, due to its proximity to downtown, availability of mass transit, shuttles to Silicon Valley and an abundance of popular restaurants. The median price for a home here is $1,001,000, up 33 percent from the same time last year.

Condominium Sales

Along with single-family homes, the inventory of condominiums for sale in the city fell by 17.1 percent, to a total of 740 condominiums. The number of condominiums under contract rose by 20.6 percent, while the number of condominiums sold decreased by 0.3 percent, to a total of 295 units.

For condominiums that were priced between $500,000 and $900,000, the months supply of inventory tightened by 46.2 percent to 0.8 months. For luxury condominiums priced above $900,000, the months supply of inventory also dropped by 64.2 percent to 0.9 months.

One area in the City, perhaps not often thought of for condos is District 1, which includes the neighborhoods of Richmond and Sea Cliff, which sits just south of the beautiful Presidio. Condos in the area have been a hot commodity with inventory there decreasing by nearly 60 percent over the last two years. The median price for a condo in the district reached $810,500 in April 2013.

Outlook

The Conference Board Consumer Confidence Index®, which had declined in March, increased in April. Lynn Franco, Director of Economic Indicators at The Conference Board said: “Consumer Confidence improved in April, as consumers’ expectations about the short-term economic outlook and their income prospects improved. However, consumers’ confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike and the sequester. Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend.”

The California Association of REALTORS® (C.A.R.) reported California home sales and prices experiencing strong increases in April, with the median price surpassing the $400,000-mark for the first time in five years. In addition, homes across the state sold more quickly in April 2013, with the median number of days dropping to 27.9 from 48 days in April 2012.

CNN Money recently reported that, “during the housing bust, sales were often derailed by low-ball appraisals that fell far shy of a home’s selling price. But now, as home prices climb and housing inventories shrink, appraisers are valuing homes at or above their selling prices.”

According to SF Gate, “San Francisco rental rates rose 15.8 percent in the first quarter of 2013 compared with the same time last year, to an average of $2,663 for all size units. Studio apartments averaged $2,075, up 16.5 percent in a year. The steepest rise came in one-bedroom, one-bathroom apartments, which are now $2,611 – up 19.9 percent in the past year and up 30 percent from two years ago.”

Not only do you have a place to live in, you also have a bunch of other benefits when owning your own home. Uncle Sam wants you to own your own home and help stimulate the economy at the same time. This is why there are still a few perks left in home ownership.

When the housing market declines, it effects everybody. When it is on the upswing, more opportunities are created for everybody. We have been in a recession for 6 years and we are seeing better times. Let’s hope that this is not another bubble.

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Spring has Sprung Alongside Housing Prices March often signals the start of spring and has historically brought an influx of property listings onto the market as seasonal home buying gets underway. In San Francisco, despite more properties being listed for sale in March than in either January or February of 2013, inventory levels are still below year-over-year figures.

The lack of inventory has fueled a drastic jump in median home sale prices for both single family homes and condominiums at the city and state levels.

According to the California Association of REALTORS®, strong sales in higher-cost coastal regions, coupled with heated market conditions have helped drive California’s median home price to its highest level in March since May 2008.

In San Francisco, that demand has resulted in 51 percent of single-family homes sold for more than 5 percent over list price and 35 percent of condos sold for more than 5 percent above list price. Click on the graph below to see the number of properties sold above and below asking price in the first quarter of 2013.

Selling Over List Price Q1 2013

click on graph to enlarge

Single-Family Home Sales

Compared to March of last year, the inventory of single-family homes for sale in the city dropped by 34.2 percent, to a total of 487 properties currently for sale. The number of homes under contract also fell by 10.2 percent, while the number of homes sold decreased by 9.9 percent, to a total of 201 properties. The decrease in sales is a direct result of lack of inventory.

For homes that were priced below $700,000, the average number of days on market fell 55 percent to just 25 days. For higher-priced homes between $700,000 and $1.2 million, the average number of days on the market fell by 53 percent to 26 days.

District 6 in San Francisco exhibited the largest gain in median home prices of all the districts, jumping 102 percent in March 2013 compared to March 2012 figures. The jump was a result of very few home sales during the month. The median home price in the District (which includes the neighborhoods of Hayes Valley, Western Addition, NOPA and Lower Pacific Heights) rose to $2.2 million in March.

Condominium Sales

Just like single-family homes, the inventory of condominiums for sale across San Francisco’s 10 Districts fell by 27.6 percent, to 682 condominiums. The number of condominiums under contract, meanwhile, grew by 3 percent to a total of 313.

For condominiums that were priced between $500,000 and $900,000, the months supply of inventory decreased by 28.6 percent to 1 month. For luxury condominiums priced above $900,000, the months supply of inventory dropped by 41.6 percent to 1 month.

District 8 in San Francisco showed the largest jump in median sales price for condos, bounding 65 percent over March 2012 numbers. The median price for the area (which includes Telegraph Hill, Nob Hill and Russian Hill) was $1.07 million.

In The News…

Consumer Confidence Falls in March

Lynn Franco, Director of Economic Indicators at The Conference Board recently said in a statement, “Consumer Confidence fell sharply in March, following February’s uptick. This month’s retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions. The loss of confidence, particularly expectations, mirrors the losses experienced this past December and January. The recent sequester has created uncertainty regarding the economic outlook and as a result, consumers are less confident.”

Highest month-to-month median price jump since 1979

The California Association of REALTORS® highlighted the record jump in statewide median home sales prices in a recent press release saying, “The statewide median price of an existing, single-family detached home climbed 13.7 percent from February’s $333,380 median price to $378,960 in March, reversing a two-month decline. The month-to-month increase was the highest since C.A.R. began tracking this statistic in 1979. The March price was up 28.2 percent from a revised $295,630 recorded in March 2012, marking the 13th consecutive month of annual price increases and the ninth consecutive month of double-digit annual gains.”

Better to rent or buy?
CNNMoney recently categorized San Francisco as a one of the 10 major cities that it is better to rent in than to buy in. The report said with home prices still among the highest in the nation, it can take at least five years before buyers begin reaping the financial benefits of homeownership.

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